United States District Court, D. Nevada
J. Dawson United States District Judge.
before the Court is Defendants' Motion to Dismiss (#27).
case emerges from Southern Terrace Homeowners
Association's May 31, 2013 non-judicial foreclosure sale
of the property located at 9783 Colored Wind, Las Vegas,
Nevada (“the Property”). The motions presently
before the Court center in whole or in part around the
question of what notice of default Southern Terrace
Homeowners Association was required to provide Plaintiff
prior to its foreclosure sale on the Property. This case
shares a similar fact pattern with many cases currently
pending before this Court. It is “one of the hundreds
of Homeowners Association lawsuits filed in this District
following the Nevada Supreme Court's decision in SFR
Investments Pool 1 LLC, v. U.S. Bank, 334 P.3d 408 (Nev.
2014) where the Nevada Supreme Court held that ‘NRS
116.3116(2) gives an HOA a true superpriority lien, proper
foreclosure of which will extinguish a first deed of
trust.'” However, after the Nevada Supreme
Court's decision in SFR Investments Pool 1 LLC v.
U.S. Bank, the Ninth Circuit decided Bourne Valley
Court Trust v. Wells Fargo Bank, NA, 832 F.3d 1154, 1160
(9th Cir. 2016), holding NRS 115.3116(2)'s statutory
notice scheme was facially unconstitutional. In light of
Bourne Valley, what notice an HOA must provide prior
to foreclosing on a superpriority lien remains uncertain.
April 21, 2017, in Bank of New York Mellon v. Star Hills
Homeowners Association, the District of Nevada certified
the following question to the Nevada Supreme Court:
“Whether NRS § 116.31168(1)'s incorporation of
NRS § 107.090 requires homeowners associations to
provide notices of default to banks even when a bank does not
request notice?” Bank of New York Mellon v. Star
Hill Homeowners Assoc., 2017 WL 1439671, at *5 (D. Nev.
April 21, 2017).
granting certification, the Court reasoned the following: In
Bourne Valley, the Ninth Circuit definitively
answered the question that the statute's
“opt-in” framework was unconstitutional.
Bourne Valley Court Trust v. Wells Fargo Bank, NA,
832 F.3d 1154, 1160 (9th Cir. 2016). However, that leaves
this Court with the unresolved question of what notice must
be provided. “It is solely within the province of the
state courts to authoritatively construe state
legislation.” Cal. Teachers Ass'n v. State Bd.
of Educ., 271 F.3d 1141, 1146 (9th Cir. 2001). As such,
state law questions of first impression like this one should
be resolved by the state's highest court. See
Huddleston v. Dwyer, 322 U.S. 232, 237 (1944). Allowing
the Nevada Supreme Court to answer this question before
considering any other motions will provide this Court the
necessary guidance as to how to approach the issues of notice
and actual notice in light of Bourne Valley.
Bank of New York Mellon, the Court did not and could
not rely upon any controlling state law as to the
requirements of notice. This Court faces the same predicament
here. An answer to the above already certified question will
provide much needed clarity, and may be dispositive of many
of the issues currently before the Court in this case.
Sua Sponte Stay of the Case
pending motion to dismiss in this case implicates the
previously certified question regarding what notice state law
requires. To save the parties from the need to invest further
resources into the issues surrounding the notice requirement,
the Court sua sponte stays all proceedings in this
case and denies all pending motions without prejudice.
district court has the inherent power to stay cases to
control its docket and promote the efficient use of judicial
resources. Landis v. North Am. Co., 299 U.S. 248,
254-55 (1936); Dependable Highway Exp., Inc., v.
Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir.
2007). When determining whether a stay is appropriate pending
the resolution of another case - often called a “Landis
stay” - the district court must weigh: (1) the possible
damage that may result from a stay; (2) any “hardship
or inequity” that a party may suffer if required to go
forward; and (3) “the orderly course of justice
measured in terms of the simplifying or complicating of
issues, proof, and questions of law” that a stay will
engender. Lockyer v. Mirant Corp., 398 F.3d 1098,
1110 (9th Cir. 2005).
these considerations, the Court finds that a Landis stay is